How to free up or increase system resources?

Ok, I've been having this problem since I started using win2k years ago. It is infrequant but very annoying.
If I have too much open or if I leave my computer on, say overnight, windows will freak out, my open windows and folders will flash and jump around the screen, the top of the windows where the task/folder name is displayed will become transparant, applications will freeze, and windows will complain that it is low or out of system resources.
Now I have 1GB of RAM currently and even if only 700MB's is used, windows will start to freak out. I also had this problem in my last PC which died, and i had over a GB of ram in that one?
Is there a solution to this, other then closing apps, which is near impossible when windows starts bugging out?
And has anyone had or seen this problem?